As Liz Taylor was preparing a business plan for her proposed yoga studio in Urbandale, she assumed she would be able to access at least one state or federal loan program designed specifically to assist women-owned businesses.

“I was a little surprised that when it was my turn, the loans for women weren’t there,” said Taylor, who ended up qualifying for a U.S. Small Business Administration loan guarantee available to any start-up small business.

One of the programs she had heard about from other women business owners, the Targeted Small Business Assistance Program, hasn’t been funded by the Iowa Legislature for the past three years. A task force is now studying whether to resume funding for the program.

According to the latest U.S. Census figures, the number of women-owned businesses in Iowa increased by 11 percent between 1997 and 2002, but at the same time, the revenues of the state’s women-owned businesses declined by 16 percent. Those mixed signals could make it more difficult for state and federal agencies to gauge whether women-owned businesses should continue to receive additional assistance.

The Legislature stopped funding the Targeted Small Business Program in fiscal year 2004, according to Tina Hoffman, deputy director of the Iowa Department of Economic Development. Hoffman said it was the only IDED program that was authorized to loan state funds to retail businesses, and also did not require the businesses to meet job-creation requirements and minimum wage or salary requirements.

In August, Gov. Tom Vilsack appointed a task force to study the program to determine if it is still needed, how much funding it should have and how it should coordinate with other economic development assistance programs. The task force is scheduled to release its findings to the governor by Dec. 1.

The program has primarily benefited women business owners.

Three-fourths of the loans from that program between fiscal years 1995 and 2005 were made to white females, who received 314 of the 425 loans made during that period. The group receiving the next largest number of loans was black males – 42 during the same 10 years. Nineteen businesses owned by black females received loans in that period.

The program’s activity peaked in 1998 at more than $869,000 in loans awarded to 50 small businesses. The program made just 16 loans in fiscal year 2006, using recaptured funds from projects that didn’t move forward and transfers from other programs.

“There are good parts to this [program], things that need to be fixed, and things that probably need to be shelved,” said Ted Williams, a Des Moines business consultant and minority business owner who was appointed by Vilsack to co-chair the task force.

“Women seem to have benefited more from the program than minority-owned businesses and businesses run by people with disabilities,” Williams said. “Part of that is they seem to have less credit problems [than the other covered minority groups].

“Our focus is, whether it’s woman-owned, minority-owned or disability-owned, let’s make sure the right people get access to the capital – human and financial – that they need,” Williams said.

Anita Messerschmidt, an information technology professional who opened her own business, EmbarkIT Inc., in May 2005, said she wasn’t aware that the Targeted Small Business program had included a loan component.

“If they were to renew the loan program, that would be awesome,” she said. “It would really help a lot of women.”

Messerschmidt, whose West Des Moines business now employs eight people, has nonetheless found some benefit from registering with the state as a targeted small business. That status allows state agencies to make purchases under $2,500 from her company without having to go through a bid process.

Though she initially considered applying for an SBA-backed loan, she changed her mind after seeing how much paperwork it would involve.

Messerschmidt and her business partner “did have some of our personal money that we put into this as well,” she said. “Obviously, that went fairly quickly. We had to have loans for some large purchases, and we’ve had good experiences with several banks.”

Taylor, who opened Liz Taylor Yoga Studio in 2003, said the information she received from the Small Business Development Center enabled her to get through the process of getting a business loan without going crazy. She obtained an SBA-backed loan after applying at three banks, she said.

Because of the planning she did, Taylor didn’t have to use all of the money she borrowed, and was able to minimize the use of her credit cards in financing monthly expenses, she said.

Janet Tingwald, president of the Central Iowa chapter of the National Association of Women Business Owners, said her members’ experience with local lending institutions has been mixed.

“Is there a judgment because it’s a woman and perhaps her age, and do they see that as more of a risk?” she said. “I have worked with some clients that have had that experience. I think it’s an institutional belief, and somewhat of a personal thing. And I think it’s up to us as women to do our research, and if one place tells you no, to go somewhere else.”